Chris Capossela: Convergence 2015

CHRIS CAPOSSELA: Well, good afternoon, everyone, and thanks so much for coming to Convergence. We’re obviously really excited to have you, and hopefully the next few days will be a great use of your time.

As the voice said, my name is Chris Capossela, and I’m the chief marketing officer for Microsoft. And I thought I’d use this session to sort of share with you how we’re trying to transform the marketing that we do at Microsoft, how do we make it more modern, how do we make it more effective. And so we’ve put together this hour as really kind of an inside look at the things we’re trying to do ourselves.

And technology has, of course, a role to play in that, but there are things that sort of go far beyond technology. So this isn’t really a technology-centric speech. It’s a little bit more about sharing the lessons, the mistakes, the best practices we’re learning so far, and hopefully you’ll find it quite useful.

Obviously, over the last year, Microsoft has spent a lot of time, and Satya Nadella talked about this, this morning, but we’ve spent about four or five months coming up with this simple notion of what Microsoft really wants to stand for, you know, what is our brand, what do we want to be.

And we landed on this notion that our products are all about empowerment, our solutions are all about empowerment. We want to do that for consumers and we want to do that for commercial customers, so every person in every organization as sort of a proxy for consumers and commercial customers.

The notion of “on the planet” is quite important to us because we want to serve all people on the planet, not just those in developed markets, but we want to do better than we’re doing in Indonesia today or in India or in South Korea. We have pockets of real strength around the world, but we have some areas where our products just have not become important enough compared to what we would like them to be.

And then this notion of achievement really goes hand in hand with empowerment.

So we started with that and we landed on this notion that we would have three bold ambitions with all of the products that we would create. We’ve had a set of efforts that was really about more personal computing, a set that was around reinventing productivity, and an effort around building the world’s most intelligent cloud. And it took us about four or five months of work as a leadership team to really land on this simple mission and these three bold ambitions.

And I’d start with this because it’s very hard to transform your marketing unless you know how you’re transforming your company. I’ve always believed that marketing is just a tool to help advance the business, as opposed to an activity you do in its own right. And so I think it’s very important to understand where is your company going, what does it stand for. And that, once you answer that, you can figure out what you need to change about your marketing.

In the case of this, we translated this new mission, these three bold ambitions, into six transformation agenda topics for the marketing leaders and all the marketing employees at the company. And I thought I’d structure this speech around these six notions.

Now, these are different than sort of our principles of marketing, which I consider bedrock principles that never change. You know, live and breathe the customer journey is one obvious principle that we have. We have six that I won’t tell you the list of, but they’re evergreen.

This is the list of things that we want to dramatically change the way we do in order to be a better company, to serve our customers better. And I’m hopeful that in two years or in three years we feel great about the progress we’ve made, and we’ll pick the next six that we need to transform at the company. And so that’s kind of how I think about the list. And I’ve structured the next hour just to touch on each one of these.

The first couple of notions kind of go hand in hand, and the first one is this notion of freemium innovation. At Microsoft, marketers, one of the things we do is to really figure out the business model of the company, how will we make money five years from now, 10 years from now.

We have a history of making money on Windows licenses that OEMs pay us on Enterprise Agreements, on EAs, if you will, and we’re changing that dramatically, and we’re moving to a model that we talk about as freemium innovation.

This whole model is predicated not on the notion that someone will pay you before they get to use your products but on the complete opposite, that almost every one of your products, certainly every one of our cloud products, will have a free tier. And I don’t mean a trial program, I mean a free tier, it’s just free, and you can focus on acquiring people for free and getting them to use your product. Your marketing can fill that top of the funnel and get them to start using it.

Then your marketing can move on from acquisition and it can actually move to engagement where we get to see what you’re not doing with the product, and we do marketing to get you to do more with the product, so you get deeply engaged in it. Rather than using Skype just on Sunday night to phone home, you’re using Skype for messaging, 15, 20, 30 times every single day. That’s engagement.

Then we figure out what a fan looks like, what is someone who loves our stuff, is loyal to our stuff, and we can enlist them to talk about how they use our products, we can enlist them to be a voice piece, a better voice piece of our company, even though they don’t work for our company.

And then we’re going to come up with some level of service that some people will be willing to pay for, but the notion is your total number of users will be far, far larger than the number of users who actually pay you for the service, and it’s just an incredible change to the classic Microsoft business model.

And yet you see us embracing this in a big way today already. We’ve recently moved the Office business, which is roughly $25 billion every year to Microsoft, it’s the biggest business we have at the company, we’ve literally moved that entire business to a freemium business where if you use Office on a phone or on a small tablet, it’s essentially a freemium model. You can just go download Word in the iPhone store or in the Android store on your phone, and it’s free. There are certain high-end features that you have to pay for, but the vast majority of it is free.

But if you want to use Word on a larger-screen device, we think there’s a lot more value to Word and Excel and PowerPoint and Outlook on a big screen. So once you cross the 10.2-inch threshold of a device, you need to pay us a subscription. And then that unlocks the premium value on the small devices as well. That’s a really radical shift for us.

Amazingly, we did this relatively recently. We weren’t making any money on Office on the iPhone or on Android phones, and we’ve had over 40 million downloads of the Office apps on those devices.

And if you think about the Office business, we do roughly 70, 75 million copies of Office a year. And all of a sudden in less than a year we have 40 million more downloads on phones that weren’t running Office. Amazing. Like that’s just a total mindbender in terms of opening up your mind to a different business model that your marketing can really help you advance.

How much marketing should I put at the top on acquire, how much should I put in engage, how much should I put in enlist? Think to yourself, if you were spending a dollar on this business, where would you spend it in the funnel? I think most people would say acquire, and that’s what I said in the beginning. The reality is we have no issue with acquisition, zero. Tons of people know the brand. I can do a press release, and all of a sudden, “Oh my gosh, Office is on the iPhone, let me go download Word and Excel and PowerPoint.” And the ratings come in and we see if it’s good or not. My issue is engagement. I need to spend more money on engagement, not on acquisition.

So it’s interesting to think about the role of marketing in different aspects of your business, and it’s really changing in our minds.

A commercial example, Office on phones is a little bit more of a consumer example. We just came out with this Power BI service. I think you’ve heard a lot about it today. Satya demoed it. I’m sure lots of people are talking about it. I think James Phillips had a keynote on it earlier today.

We made this free, like right out of the chute. It’s just free. Go to this website. It’s one of the best designed websites we’ve ever created. It takes about 10 seconds to sign up. And it’s not a trial, it’s literally a free service. And we made it drop-dead simple to share the dashboards you created with people outside your organization.

Now, not everything is free. There’s essentially a basic tier of service that’s available for free. But we think that this is the future of our business, is building super simple services to get started with that are free, that are easy to share, and you build that network effect, and then we’re going to behind the paywall have lots of interesting capabilities that we think are going to be what people are willing to pay for.

So that’s a little bit about this notion of freemium innovation, and it just changes the way we think about marketing.

So think about your business model that you’re in. How is the cloud going to change it? How are devices going to change it? How should you be thinking about changing the way your company makes money? And if you do that, how does that change how you think about the role of marketing? That’s one of our big transformations that we’re going through.

One of the things we realized immediately is marketing dollars spent around engagement can be effective, but actually product design is far more effective at getting people to be deeply engaged in your products.

So my second transformation agenda item for Microsoft is this notion of using our amazing innovation engineering resource pool to actually build marketing into our products.

Now, when I say that, I don’t mean cheesy, offensive marketing, I mean building the products so they work beautifully together, so that when you use one of our products it naturally leads you to using another one of our products.

Here’s a piece of research we did that I realize is hard to absorb because it’s detailed, but let me walk you through it.

The size of a circle is how many consumers use the product in the U.S. in a short period of time that we measured it.

The arrows that connect the circle tell you that if you use product A, you’re statistically more likely to also use product B than the rest of the population that does not use product A.

It’s just a little snapshot in time. It’s not the end-all, be-all. I don’t want to reorganize everything around this. But it’s an interesting piece of data. It shows you that we’ve got a lot of big businesses at Microsoft. Windows is big, IE is big, Office is big, et cetera. But it also shows you that we don’t have nearly the connectivity between our products that Google has engineered and that Apple has engineered.

And the beautiful thing about having lots of lines is that you don’t have to market all of your products. You only market the locomotives. And then when someone uses your locomotive, it pulls along the cabooses.

If you look at what Apple advertises on TV, at least in the U.S., it’s all iPhone and iPad. And yet you see all the lines that connect their ecosystem. They can focus their marketing dollars on a very small number of things, be very disciplined, but because they’ve engineered their things to work together, one product naturally leads to the next product without any marketing at all; very efficient marketing to build your marketing into your products.

We’re doing this in a big way. If you click on the Surface Pro 3 pen, you naturally become a OneNote user. That took really hard engineering work. We had to convince the Windows team to work with the Surface team to work with the OneNote team. And yet when you buy that Surface Pro 3, if you just click the pen, even if the Surface is asleep, it will wake up and above your lock screen OneNote will come up and you’ll start taking notes. And all of a sudden a Surface Pro 3 user starts becoming a OneNote user.

The difference in OneNote usage on Surface Pro 3 devices from your average Windows device is about 40 points — 40 points. Surface Pro 3 is now my best vehicle for getting OneNote users. So what am I going to market, OneNote? No, I’m going to market Surface Pro 3, at least if you do that particular narrow math. That’s one example.

We’re bringing Cortana to Windows 10, as many of you have seen from our press efforts. If you use Cortana, you’re actually becoming a Bing user. It’s very hard for me to get you to go to Bing.com instead of Google.com. Google.com is just such ingrown behavior. It’s very hard to break that familiarity. But if I introduce a new way to use Bing through a personal digital assistant called Cortana, and that becomes another way you start executing searches, this is a way I can build Bing into every Windows Phone, into every Windows 10 PC.

And we expect you to have an all-in-one in your kitchen and to be playing your music and just to be able to say, “Cortana, next track,” and we’ll change the track, “Cortana, play Taylor Swift,” and we’ll go off and play Taylor Swift music for you. I mean, that type of change of building Bing into Windows gives me a far better, more effective way to win a Google user over to Bing than just competing head to head.

Here are a couple of other examples. Here’s an upcoming version of Outlook in the browser. You see the left-hand pane as you might expect. You see the middle pane is your inbox. The next pane is your reading panel.

But then we also give you the ability in the toolbar to click on the Skype button, and we’ll drop down a Skype panel, so all of a sudden you’re using Skype to instant message anyone who’s in email. You click on the phone icon or the video icon and we’ll escalate an instant message to a video call.

And all of a sudden every Outlook.com user, and there are many hundreds of millions of them, will quickly become a Skype user, and every Skype user will hopefully become an Outlook.com user. And I don’t have to spend any marketing money at all. I get you to use Outlook.com, and hopefully it’ll naturally lead you to being a Skype user.

So that third one for us is really incredibly important because it’s using a resource that we have a lot of, engineering at Microsoft, and it’s counterbalancing a resource that we frankly want to spend less on, marketing, in order to get people to experience the full ecosystem and fill out those lines on that blue, purple, orange chart, to really compete ecosystem to ecosystem as opposed to product to product.

The third one for us is really about this notion of storytelling. Now, I think we all know storytelling is one of the great — you know, it’s one of the great experiences of being alive. When you hear a great storyteller, it goes back to the early, early days of humankind. Maybe they were storytelling at a fire and there certainly was storytelling on cave drawings. You know, it’s amazingly emotional stories being told very early in our history.
The trick with storytelling now isn’t that it isn’t just as interesting, it’s just that there are so many darn places that you can be lulled into thinking are important to tell your stories. Is it 140 characters on Twitter, which takes a certain skill set? Is it a 12-minute TED talk, which takes a different skill set? Is it a Satya Nadella keynote speech to 12,000 people at a big conference? That’s a different skill, that’s a different place to tell a story. Is it on TV, is it on Facebook, is it on LinkedIn? I mean, there’s a million places to tell these stories.

So the challenge I have at Microsoft is people want to tell tons of stories and they want to tell them everywhere they can possibly tell them. So how do you find the discipline to figure out what’s an uninteresting place, just don’t do it, and where your real value is, really where should you spend your time, what is the value of a Facebook like or a Facebook fan page.

I find it amazing that we actually spend a lot of time with the Xbox team and the Surface team and the Skype team on Facebook and Twitter. And we’ve got millions of followers, and we count them versus our competitors.

And one fascinating thing just to think about is Apple literally does not have a Twitter handle, literally does not have a Facebook page, none. They’re a consumer company, much more than we are, and they just say, you know what, maybe we’re wrong but we’re just not going to bother. Who cares? I’ve got my stores, I’ve got my big conferences, I’ve got my devices that people seem to buy and like. Who cares? Like marketers, stop, don’t do it. In fact, you get in big trouble if you try to do it. Are they right? I don’t know. But they think about it, they’re disciplined on it, and that’s kind of fascinating.

So for me modern storytelling is all about where do you need to be and then how do you build the skills to tell great stories in the forums that matter most for you. And I wanted to talk a little bit about the ones I’ve seen that I’ve really been blown away with.

The first one I wanted to talk about was really to bring up a customer of ours, if I can advance the slide, there it is, and a partner of ours that’s here at the Conference. These guys have done some amazing marketing. They’re actually giving some sessions here at the conference. They’ve won a bunch of interesting creative marketing of the year awards, and they’re a brand many of us know. I mean, I think this is one of the brands you can travel around the world and if you say it, people know it. And these guys have some amazing stories of, like, going through passport control and saying, “Heineken,” and like, oh, doors open. It’s like, oh, that’s kind of interesting.

So I actually didn’t want to have all the stage to myself. I wanted to have Leonard and Avout (ph) join me on stage to share a little bit of their storytelling thoughts on how they do it for one of the world’s great brands. So please join me in welcome Leonard and Avout. (Applause.)

Great to have you. Thanks so much for making the long trip from the Netherlands.

So please, tell us a little bit about your storytelling approach at Heineken.

LEONARD: It’s very important, because we’ve been basically selling the same product for 150 years. And as Mr. Heineken once said, “I’m not in the business of selling beer, I sell a brand.” And that’s a fundamental shift.

So for us it all starts with a creative idea coming out of a very solid brand asset, but it needs to be relevant for your consumer, because if you can reach him, I can throw as many media as I want at you, but if I can’t actually touch your heart, how will I ever make the difference?

So it’s also with making the difference about superlative creativity and that’s not just going to your ad agency and saying, it needs to be better, I need to be able to win every award in Cannes this year. No, it’s a cultural mindset that we instill within Heineken where we need to be inspiring people, we need to even be provoking people to come up with bolder ideas that engage people, and especially engage you, our consumers.

It’s about contagious content that travels, and for us we’d rather have that people talk about us over a beer one-on-one —

CHRIS CAPOSSELA: Heineken, I assume.

LEONARD: What else?

CHRIS CAPOSSELA: Amstel.

LEONARD: Oh yeah, we have —

CHRIS CAPOSSELA: As long as it’s in the family.

LEONARD: We have 400 brands, so there’s a good shot that you’ll drink one of ours. (Laughter.)

No, but that’s important. That’s way more important getting in that sense a like or a share on Facebook. If people actually talk about you, if you’re part of the conversation, that’s what counts.

And then it’s about actually being relevant at the right spot. So we call it our paid, owned and earned, POE. That’s a nice new abbreviation for everyone to play Scrabble with, I guess, at home. It’s about being at the right spot with the right relevant message.

You know, if I’m in a bar, am I then interested in watching a TV commercial? Maybe not, you know, but there’s other ways to actually then connect with the person.

And lastly, obviously, is that when connecting, and if we got it all right, to actually trigger participation of the consumer. That actually starts spreading the whole earned piece and actually makes the thing larger than life, and that’s what we’re all about.

CHRIS CAPOSSELA: Very cool.

Now, you guys, as I was learning about how you do marketing, you have a pretty interesting partnership between marketing and technology.

Avout, can you just give people a little taste for how you guys work together, and sort of what your different jobs are?

AVOUT: Sure, sure. So I actually work at GIS, which is basically Heineken Global IT. And well, as you can tell, doing marketing is really a job that requires all the attention, and is something that is not so simple, and all kinds of structure behind it. So they need to focus on their job, and it’s my job to actually help the marketers with technology by implementing everything that they dream of.

So I have a team, which we call the center of excellence in marketing, and consists of project managers that actually take away the worry to bring things to life.

LEONARD: I like that. I like that.

CHRIS CAPOSSELA: Yeah, let him worry about everything —

AVOUT: No, but that’s cool, that’s totally cool. So let the marketers focus on their objectives and we’ll make sure that it actually happens.

So we manage technology, so we have a bunch of consultants, especially in the digital space. And so we know all about our user experience and all those kinds of things, just to make sure that whatever is created by the creative guys actually can become something tangible.

So then lastly, we enable our vendors actually to become successful. So, I mean, working with Heineken can be a beast.

CHRIS CAPOSSELA: Yeah, big, complicated company, like Microsoft.

AVOUT: It’s complicated. There are a few demands here from Leonard, so that has to be met, I mean, certain deadline, the go-live of a campaign or something, a big Champions League match, for instance, that just you must be there, so yeah, pretty high demands.

So we help — actually we help our vendors become successful and thereby creating success around the whole story.

CHRIS CAPOSSELA: I think it’s really key, that notion that your vendors are — you know, part of your job is to help actually make them successful because then you’re going to be successful, a little bit of a different mindset than I think a lot of companies have when they think about people outside their full-time employees.

AVOUT: So it’s sometimes funny when we talk with vendors, we have to actually convince them that we, my team, is there to help them. Sometimes they don’t believe it yet.

CHRIS CAPOSSELA: Totally. I’m not surprised.

Now, you guys have won a bunch of awards for a bunch of different work, but the “Skyfall” work, the James Bond work, tell us a little bit about this one.

LEONARD: So Bond is a big property of ours. We’ve been sponsoring it now for over six movies, even though every time people say like, hey, is Bond now trading in martini for Heineken? (Laughter.) We’ve been doing it now for like 15 years, so we keep on going like, oh, OK.

And it’s easy to go live in 90 countries in over —

CHRIS CAPOSSELA: This is a Web experience?

LEONARD: Yeah, yeah, but the entire campaign, so from broadcasting on TV to in-store promotions to digital, everything needs to be live in 90 markets in over 36 languages, with all kinds of legal restrictions, because with alcohol in one country you can do this, LDA, legal drinking age in United States is 21, in the Netherlands it’s 18, so how do you cope with that?

CHRIS CAPOSSELA: You cope very well with it. We don’t cope —

LEONARD: We cope.

And so we then had, like, one main idea, which was crack the case, and that you could see back basically was inviting the consumer to step in the world of Bond and play that role for that one moment. You could do it in shop floor promotions, could see it on the TV commercial, and also in our digital experience where we didn’t just have like a gizmo, we wanted actually to really immerse you.

So what we did, we made a widget that could live on Heineken.com, on Facebook, on basically any third-party site, and that showed you the film but also smoothly landed you into the digital experience.

And people actually weren’t aware that that actually happened to them until the Bond girl started talking to you. And by then you’re already like a minute in, and then yeah, obviously when you’re tasked with a challenge to crack the case and help her out, well, who are you then to refuse the Bond girl? (Laughter.)

So we had a lot of people all over the globe in all these languages, and it needed to go live in that one single moment on October 1st, and it did.

CHRIS CAPOSSELA: Amazing. What were the sort of lessons that you pulled out for making this happening with, I guess, relatively low drama, it sounds like?

AVOUT: Well, of course, we kept everything behind the scenes working with those guys. I think we had the guys that actually build the widget. We had the guys that maintain the dot-com. We have the guys that do performance measurements, the guys who do security testing, the PI, personally identifiable, information kind of things that need to be taken care of. So there’s a huge amount of things that need to be taken care of. So those are the lessons, I guess, that would do it even better next time.

CHRIS CAPOSSELA: But you told me that after this thing went live there was sort of this eerie calm compared to what you were used to?

AVOUT: So it went live, and normally with IT and digital, you might have like a beta version going live. And we went live with in full, in total with all these markets, and upper management walked by my office and said, so is this live then, because we haven’t heard you running across the hallways or yelling at people? No, no, it’s working perfectly, like everyone is happy. So there’s no complaints.

And then you start almost, there’s got to be something wrong here. You can’t tell me it’s 100 percent OK, and because it was, like, huge amounts of video content with all these challenges people needed to do, and it was all living in Azure. And it needs to be kept on being stable. Rule No. 1 was, it can’t break. Whatever you do, it can’t break down. And it’s a comfortable silence.

CHRIS CAPOSSELA: Well, Leonard and Avout, thank you so much for coming this way and sharing your story. We really appreciate it. Congratulations. Thank you guys so much.

(Applause.)

So maybe to learn some of the best practices there, there were four things that I wanted to also call out as other examples that either we did and really surprised us, or that I’ve seen others do that I’ve sort of taken to heart.

The first one is this speech that one of our engineering leaders gave at STRATA. STRATA is a big data, data sciences conference that the last few years Microsoft has gone, but we’ve really struggled to sort of do well there. And this year we took a super different approach, and one of our engineers went and gave an eight-and-a-half minute keynote, just eight-and-a-half minutes long, and the notion of the keynote was the Connected COW. That was the name of his speech.

And he basically just told this amazing story of how every company is a data company, and if you don’t believe me let me tell you the story of a Japanese dairy farmer who literally put pedometers on his cows and connected those pedometers to Azure to measure how frequently the cows were moving around. And it led to these amazing insights on when they should look to produce baby cows based on activity. And the data was staggeringly good. The efficiency that they were able to gain was quite amazing. And this very odd speech about a dairy farmer who put pedometers on cows, with great photos of cows walking around, and he wasn’t even a phenomenal speaker, but he’s the engineer behind this solution. It really struck a nerve, and he was rated the top speaker of all the speeches at that conference.

So we went from sort of an unknown at that conference to showcase by taking a storytelling approach, not a technology approach, and then telling kind of this really interesting story that had real amazing data to back it up. There’s actually a Fujitsu solution that was built on Azure. Microsoft wasn’t even that involved. But I thought it was a beautiful example.

The Xbox team does some of our best digital marketing at the company. And they’re the ones who have really latched on to this notion that it’s good to pay attention to all your customers, but fans are really where it’s at, particularly for passion points like gaming or like sports, let’s say. And they did a campaign with this race game called “Forza,” and the campaign was called Forza Fuel, where they essentially made the participant in the campaign step through a lot of hoops to compete for something. And it basically weeded out everyone but the diehards, everybody but the people who really cared about this game and about racing.

And the reach that we got from those fans talking about what they were doing to compete in this competition was just mind-blowing. And it did as well as something like a “Halo” campaign. And if you know anything about Xbox, you know “Halo” is like the “Iron Man” of gaming. It’s just a huge blockbuster. So we learned that fans can reach people that we can’t reach with our own efforts, and that was really important to us.

We’ve also learned to do our own storytelling rather than using the press. I think for a long time we just thought about the press as the only way we can reach the masses. You’ve got to get that New York Times article, or you’ve got to Walt Mossberg to write about the Surface, or whatever. And those are still fine avenues to go down, but a few years ago we started a website called Microsoft.com/stories, Microsoft Stories, and we just started telling stories on that site. It costs us about $5,000 to tell each story. They’re very long. They’re long-form digital stories with video and audio and photos, beautifully told. We have about five people who work on it full-time, two writers and the three other people that make this all happen. It’s built on Microsoft.com, no additional real money for every one of these stories.

Recently we told a story about work that we’re doing with guide dogs in London and with technology that you can see this woman is wearing around her ear that’s actually up against sort of your jawbone. And as you walk around London it’s picking up beacons that are in the city and it can essentially through your Windows phone tell you something about where you are in London and tell you what direction to turn in order to get to where you want to go. And so the obvious thought is that you would use this for people with special needs, maybe people who can’t see. But, it quickly turns into sort of a tourist attraction and something that anyone who can’t get around London would actually like to do.

And so a brilliant piece of work our consulting team in the U.K. did with a partner and we just wrote this story on Microsoft.com, 170 press stories were generated by this one story. And all of them referred to our site, because we just told it directly. But, because it was interesting we did a little press work, a little paid media. It just exploded. And so we’ve quickly realized with the pressure on the press we need to tell our own story and then use the press to amplify, and that’s been a huge learning for us.

And then outside of our world, outside of the Microsoft or high-tech world I thought the Super Bowl ad that Always did, which essentially turned a cultural insight into a social inspiration, was incredibly bold. This is the campaign that they actually did before the Super Bowl, well before the Super Bowl, which basically profiled adults answering a question of what does it mean to run like a girl, or throw like a girl or fight like a girl. And of course, they’re doing it in a very derogatory way, and then they bring in young girls, eight-year-olds, seven-year-olds, and ask them the same question. And they’re, of course, seeing none of that sort of negative yet. They’re still very confident and optimistic about what it means to run like a girl. It’s an amazing campaign.

And then the fact that they bought a Super Bowl spot and the boldness of buying a very male-dominated media spot I thought was amazing. So some really bold storytelling that I think has inspired us in ways to do some of our own storytelling in that way.

The fourth transformation priority for us, we can’t do really any of this very well, or we’re kind of blind if we don’t have a great data platform. And this is probably the most important thing. I can try to do the other five items on this list, and I can have a good year, and I can have a bad year, but if I don’t have a phenomenal data platform there’s no way I can build a long-term awesome marketing engine at the company. And by data platform I mean really understanding what are people doing with our products and what are they doing with multiple products? And what are their attitudes about their products?

This is a screen shot of the Power BI dashboard that we show you when you sign up for Power BI, as a way to just not give you a blank canvas, but to try to show you this is what a dashboard could look like. The product I am using the most in my daily life at Microsoft outside of Outlook now is Power BI. And I use it to combine behavioral data, and attitudinal data, because right now everybody is in love with behavioral data, DAU and MAU, if you don’t know what these are, daily active users and monthly active users, and there’s even a percentage of DAU over MAU, which is an element of an engagement. If you use Facebook once a month, or use it monthly, but you also use it every day, your DAU/MAU is essentially one, because you’re using it daily and you’re using it monthly.

Most products don’t have a DAU/MAU of one. They have a DAU/MAU of .2, or .37, or whatever engagement frequency, duration, tenure. These are all things I can measure in the product. How often is the cursor clicking in Word where Word is on the foreground? I can measure that, not in the background, in the foreground, you typing, you reading, I know. That’s great. But, if I don’t know how happy you are with my product then it’s kind of useless. So the magic for me is trying to combine your net ratings, your recommendation rate, your willingness to promote, your declaring affiliation with “Forza” the racing game, your loyalty to Skype, combining that with the behavioral data, that’s what lets me start to calculate what does a fan look like? Is a Skype fan someone who uses Skype the most, maybe? Is an Xbox fan someone who spends the most money on Xbox, definitely not? They’re someone who uses Xbox and bleeds Xbox, and fights for Xbox on social media.

So at Microsoft we’re busy trying to literally go and to find what does a fan look like for every one of our products. And what’s the next best product we want that fan to be exposed to when they come to our website, when they launch their product, when they go to a conference, and how do we get really, really good at that? So that data platform is just life itself.

I thought for the next part of this presentation I’d turn things over to Allison Watson, a co-worker of mine. She runs all of marketing for the entire United States subsidiaries. So she’s got to think about how do I bring customer touch points, customer satisfaction together with revenue, because her team is on the hook. They have huge customer exposures every day, tons of marketing, and they have to ring the venue bell and the customer satisfaction bell every week, every month, every quarter. And I thought Allison could come and share how does she do storytelling, how does she use the data platform, in sort of a day in the life of one of our marketers.

So please welcome the Corporate Vice President of Marketing in the U.S. Allison Watson to the stage. (Applause.)

ALLISON WATSON: Thank you.

All right, like Chris said, I’ve changed how I work more in the last eight months than probably the last five years combined. It starts with my personal philosophy that I bring to work every day, which is to seek challenge, balance, and fun. When I wake up every morning I have a lot of fun with my son, 17 years old. We just recently traveled and hiked in Iceland. While I was there I completed the ALS challenge in a glacial waterfall.

At Microsoft last year I had the honor and privilege of running the Microsoft Giving Campaign, where over 67 percent of all the employees in Microsoft raised over $119 million for 92,000 organizations. And proudly I work with Pete Carroll as a football fan and as a partnership in his “win forever” philosophy about creating cultures that drive passion for people and create individual and team high performance.

Now when I go back to work each day I’m responsible, as Chris said, for driving a product that will make $20 billion in revenue. I have 22-1/2 million business entity customers and in the last eight months we ran approximately 5,700 events to try to reach out and talk to all of those 22-1/2 million customers. So I thought I’d share with you a day in my life in a quick eight minutes of how I’m supported by what I consider to be the world’s best data platform.

What I’ve got up and running on a PPI board here is what we call a Windows App Portal for Marketing. It brings together the 58 applications that are both new and old that run inside Microsoft into one beautiful screen, touch interface, for me to run my business. I’m going to share with you three different scenarios that have changed what I’ve done.

My job is to take the anonymous users Chris was talking about, to turn them into prospects, potential leads for my sales force, obviously into users and ultimately fans. So let’s start with our anonymous base, which is over 250,000 tweets and partial talks that are going on on a weekly basis that we triage through my social command center. I’m going to take us into the live dashboard of my social command center.

And up in front of me what I see right away is what’s going on with the set of folks that I have that are community managers across 20 brands at Microsoft listening actively to 94 social channels. We have a lot going on today on the Microsoft Convergence tagline. Three minutes ago we were talking about how DAU and MAU score might be useful to allow you understanding of attitude, which is one of Microsoft’s new power metrics and must be being talked about in another room in the conference.

In the middle column, we just type in directly into the Convergence hashtag, and we’re seeing what’s going on live on the Convergence hashtag. You can see it move. I’ve got an RSS feed. And then as a command center, I can find what happened in the last 24 hours. In my social command center in the last seven days I’ve had over 26,000 messages sent into the CIC and I’ve triaged over 200,000 messages coming in across my 20 brands on the Web.

What you see in the center is what we’ve started to experiment with as talking back to people on social channels can be interesting and engaging, but the game really changes when you start to talk to them about who they are in the dialogue that they represent. So we started experimenting with what we called miniature ad units or social micro-content. And you can see some listed here about a campaign we’re running in Microsoft Cloud for Government.

I want to show you a few stories together from our social command center. I have four stories in front of you that have happened in the last six months or so. The first one is in our Xbox brand, it’s our most lively brand, as you might imagine, in the social sphere. But as the lead singer of a popular band from Australia called the 5 Seconds of Summer, Luke Hemmings, who on December 23rd tweeted as he was on tour that he missed his Xbox, we had our social command center team listening, they write back.

They create a piece of social micro-content that you see here. The tweet says, “Luke at 5 Seconds of Summer, no need for amnesia, this love is real,” which are direct words from his song quote. With it is attached a picture of him with his guitar, an Xbox controller in his pocket, and a lip ring around his lip, which is something that is in his picture. And it says, achievement unlock more time beside you. It was our single largest retweeted effort. In the first 24 hours, we had 35,000 retweets, and 65,000 favorites as a result of engaging in this interesting way.

Now, we might move on to something slightly, you might call, more mundane, which is our SQL Server fans out there that are interested in our data platform. David Foley tweeted: “Why were all the really good sessions at PASS 24 hot from 1 to 5 a.m.?” This is a 24-hour SQL tech session. “I’m awake for the last one, but no access to the shower” at 6 in the morning.

At 2 in the afternoon we tweeted back to him and to all of the SQL Server fans we have out there, “did any of you miss our PASS 24 Hot Sessions? Check out all of our recorded sessions here.” And a piece of micro-content that shows David sitting with a window in the dark, in the moon, in a shower robe with a bicycle picture on his back, which if you can see his picture, he’s an avid bicyclist. “David, don’t worry we’ve got you covered.”

At 2:43, three minutes later, he tweets back, “Thank you. Wow, I certainly didn’t expect this. I really appreciate it.” And four hours later he says, “I still can’t believe that picture of my goatee, a bicycle pic, shower drop was absolutely incredible.”

So we’re out there creating fans regardless of who is out there in our social sphere.

Here’s an example when Chris was out presenting at a Masters of Marketing Conference. He was presenting about Power BI. Someone tweeted out, “The Power BI data platform is just what an analytics junkie would be jonesing for.” Our brand tweeted back, and just retweeted exactly what the user presented. And another customer chimed in and said, “I want it yesterday, how do I get started?” Our listener on that was able to take the name from the Twitter feed, compare it to the LinkedIn sales navigator profile. We had a sales rep reach out immediately, and we were on a sales call within five days directly to the customer talking about landing Power BI in their organization.

And a final example is a fun one from Surface from Sara who said, “I use my Surface pen to sign an urgent approval doc directly on my screen last week while I was in a meeting. It was a wow moment for me.” Our Surface team tweeted back a picture. We found out she worked at Cici’s Pizza that shows her pizza in the middle of her Surface signing her pen with wow. And she tweets back, “here’s our leadership team at our Surface buffet.”

So we had a lot of fun engaging in miniature ad units as a way to get millions and millions and millions of anonymous users out there one step further down the path to getting to known, and we have all kinds of clever tricks that we’re working to try to bring this organization to get very personal with what people are excited about. If you’ve seen Seth Godin speak earlier, I would call it getting the non-normal people excited about doing something that’s about them. So that’s about social engagement.

The next thing I would like to take you to is what we’re doing in the era of marketing automation. I had a chance to meet several customers today that are working on thinking through how they really, really drive an automated platform to both take costs out of their marketing departments, but more importantly be more effective in taking users from known through to sales and usage.

I’m going to click into a journey map directly inside Microsoft Dynamics Marketing. This is a journey map we built for the Microsoft Cloud in Government campaign. We launched this campaign several weeks ago when we launched Microsoft Cloud for the Government, which is our end-to-end set of solutions and offerings available with FRPA, HIPAA and other compliant regulations required for government usage. We have 83,000 potential breadth government customers in the United States, and about 2,500 very large federal, state and local agencies.

So we’re going to take advantage of getting out to them. What you see is a journey map that we’re using to actually run this live campaign. The very first thing we see in my journey map is I might see that we’ll start with how do we capture organic site traffic that happens on to any landing page when we have out the campaign and/or how do we reach out to customers that we already know of to bring them into our campaign?

Within our campaign, we want to invite people and encourage them to come to a webinar about Cloud for Government. And because of our journey mapping that we have, we can automatically and very easily create heuristics for what happens when either people take the action we want them to take or don’t take the action we want them to take, which actually might be the slightly more important group.

So for those in this case who wanted to attend the Cloud for Government Webinar, if they did attend, we waited a day and sent them a thank-you note. We wait a day and send them a post-webinar follow-up. For those that did not attend but opened our email, we had one set of actions, and for those who were sent an email, did not open the email, we went and had some other set of actions.

So a very easy and rich framing customer journey mapping template that allows marketers to really, really get serious about the if and else statements of what happens if you do or don’t take action with our marketing. Just to show you how easy this is to really enable great marketing for marketers, let’s presume that we have a landing page around coming to this Convergence event that we had “user attended” as a trigger. At the end of the day, after they attended, we’ll send them a thank-you note, or if they did not attend we’ll wait a few days and send them a post-Convergence recap. I want to wait another day.

And then one of the things we find out is people leave this conference and they go home and they want to share the information with others at their workplace. So I’m going to go ahead down to the folks that attended Convergence, and I’m going to drag in an activity, another email activity directly to here. I’m going to insert a post-Convergence invite directly into that activity so that everyone who is in this workflow will automatically get invited with this email, and then quickly I will say a trigger, and it will automatically be able to define a trigger that will give me an if/then/else statement if they either answer or don’t answer this email.

Now, my marketing team probably spends more than 30 seconds thinking through how they will actually enable this marketing kind of flow, but what we have found as a result of being able to test different things that happen when people do and don’t open different activities we drive is we’ve been able to figure out simply by the change of the subject line in an email, we can make a difference between 30 and 100 percent in our click-through and upgrade rates.

The second thing we find is that because we have lead scoring behind this, and we wait until we think the customer has exhibited enough interest to actually be worth taking follow-up actions with us, we score them and turn them into what we call a marketing qualified lead, or an MQL, that when we pass MQLs into our marketing intellifill center that we’re finding a 10 percent conversion rate into lead, pipeline and close sales. So we’re having very good success at using marketing automation to really change the way, speed up and become more effective with our marketing dollars.

Because we’re a large organization, managing all of our digital assets can be slightly unwieldy, and one of the areas of waste in our marketing department is people creating new content that might already exist, or not leveraging and staying on messaging. So as a way behind our marketing automation system, we have an Azure-based digital asset management system we call the Cloud DAM. I’m going to walk in and show you how this flexible DAM is working for our marketers who are entering content into our marketing campaigns.

What you see in one integrated view is all of the assets available inside Microsoft. I’m going to go in and enter this Microsoft Cloud for Government campaign we were just looking at. And all of a sudden with one click I have all of the marketing assets, emails, videos, Web banners, TV ads that have been created for our Microsoft Cloud for Government campaign. What you’ll notice quite quickly and wonderfully is because we are a global organization you’ll be able to see that I have German-speaking content available, Spanish-speaking and Chinese content available to me.

I also have every different form factor, as I said, that I created. So if I click into this particular one I can quickly, without having to open this file or go figure it out, or source it from the server, I have a quick view of it. And this is a recent advertisement we’re running for the Microsoft Cloud for Government campaign.

(Video segment.)

So a quick and easy way for all of our marketers to have access to all of our content quickly to enable us to make that marketing automation system work. And the last piece of making marketing automation work is figuring out live how everything is actually working as it works. So we have, as you have heard, the buzzword of the day would be Power BI. I’m going to bring up my Power BI dashboard here. So that I know what’s going on, one of our opportunities is to identify how many net new contacts we have in our marketing org, let’s see if I can get this, that’s running live against this campaign. So you’re probably used to seeing these Power BI charts that are coming up. This is a live one about how many net new contacts we’ve had in the last — since we started running this campaign.

I’m going to go ahead in the interest of time and go on past that right now. So that summarizes what we’re doing as marketing automation, working to try to get out, save money, be more relevant, do fast A/B testing, failing fast, so that we can deliver more leads from our 22-1/2 million customers.

The final segment I want to share with you is none of this would be possible in modern marketing if I didn’t attract, retain and develop best-in-class, world-class talent, and attract young and early-in-career folks to come work for me. So I spend time bringing all of this together, starting with the best employees in town and starting with enabling our employees with the best tools.

So I click into my Office 365 SharePoint portal system and you can see suddenly something that doesn’t look like a SharePoint portal server, a beautifully graphic server. We’ve integrated visuals like pictures, digital signage, external marketing technologies, LinkedIn. You’ll see a graphical scrolling view, pictures of the team that leads the teams of folks that work in my organization, rich photos, career planning, access to all of our content, et cetera, and then information about all the people that work in my organization.

As a way to keep this organization running and growing, since we’ve moved to this kind of beautifully visual environment, we’ve doubled the amount of visits we have monthly to this page. We’ve deeply increased the amount of training by our employees on the things that we’re trying to change, because we’re trying to change everything fast. And we’ve doubled the amount of time that people do spend accessing the content that we create for them, so they can be best at their jobs.

We also embrace all new forms of marketing types out there in order to have fun while we do work. So we do gamification as a very popular way to get people to engage in training. So I’ve got — I’ve opened up at the very end of my game “Mission Possible 3” and I have a question. We’re studying how to be great storytellers and if you haven’t read Joseph Campbell’s book “A Hero’s Journey,” it’s the canonical book on storytelling, and a book called “The Story Wars” by Jonah Sachs, came and trained us all about how to be master storytellers and said every story has five components. We’re reminding our folks what they were. In this case I happen to know the answer to the very first one and right away I get a badge, I can post to Yammer. I can have a contest. I can work against the other employees in my organization.

So that’s our employee portal. It’s doubled the amount of engagement we have. And because we live in a cloud-first, mobile-first world, that environment we find on our portal is easily transferrable, because we’ve designed it with responsive design directly onto our phone application. So I’m going to open up — I’ve got cold fingers. There it is. So you’ll see the exact same environment. Again, we didn’t redevelop anything, between the Office 365 SharePoint online site you see there, and just did it with responsive design. So we have full fidelity. We’ll run on a Microsoft Lumia phone. It will run on an iPhone, on an Android phone, all without changing the environment.

We also do have an app version of this that can get more precise, but one of the things we find in the marketing department is where do apps start and where does life begin in terms of how you build development and optimize your cost. So we find that this environment has really enabled us to be successful with our employees.

So I hope we shared with you in a quick moment how I’m working super-differently this year and how I’m working to bring the best talent to Microsoft to take us to the future. I would love to hear your stories about how you’d like to work differently. Feel free to share them with me and I’ll look forward to hearing about your work on our best data platform.

Thank you. (Applause.)

CHRIS CAPOSSELA: Thank you.

OK. The last thing I wanted to talk about is just the role of the Microsoft brand, and we as a company, I think, have had a long history of really favoring our product brands over our company brands. But, a couple of things have changed. No. 1, we know consumers are choosing an ecosystem more than ever. They might buy one device at a time, but as soon as they buy a device they’re getting pulled into an Apple ecosystem, or an Android ecosystem, or a Windows or Microsoft ecosystem. And No. 2, on the commercial side CIOs and business decision-makers tell us they don’t really want to move to the cloud with a single product. They want to move to the cloud with a partner. They’re going to bet on Microsoft, or on Amazon or on Google to move to the cloud, IBM, what-have-you. So that both of those trends tend to make us want to lean more to the Microsoft brand itself.

We also have found that the brand is just incredibly strong. While Windows is a strong brand and Office is a strong brand, the Microsoft brand is actually the strongest one we have. It’s typically top five in every brand survey that’s been done in recent years. Interbrand is maybe the best known one. And we also see the trend of the brand is very good. I’m excited about Microsoft up five points. This is consumers answering this question. It’s stronger with commercial customers, proud to use up four points, a brand that surprises me, innovative up four and three points.

We introduced the new Microsoft logo just two-and-a-half years ago and now we do unaided awareness surveys that tell us, hey, if we put this four-colored symbol in front of consumers how many of them say that’s Microsoft. We’re up to 67 percent globally in just two-and-a-half years. We’ll look at that four-colored symbol and say that’s Microsoft. In the commercial space it’s higher. It’s in the 80s and 90s and it’s even higher than the old logo, despite that existing for about 18 years. So we’re seeing that really take hold. The brand is just quite strong.

We’re right now researching what the new brand for the — or the new name for our browser should be in Windows 10. We’ll continue to have Internet Explorer, but we also have a new browser called “Project Spartan,” which is code-named “Project Spartan” and we have to name the thing. This actually shows you in the U.K. what is the most appealing name for Chrome users. And if you look at these obviously you see that I’m not showing you the actual name, but if you look at A when it’s Microsoft A it scores 182 out of 200, 200 is the max possible. When it’s just A it’s 145. When it’s Internet Explorer A it’s 113. And when it’s IE A it’s 107. So you can see just by putting the Microsoft name in front of it the delta for Chrome users on appeal is incredibly, incredibly high, as another nice example of the strength.

We’ve done a lot of work to clean up the brand and lean into the brand. A couple of years ago on the left-hand side every product had their own symbol, had their own logo, had their own color, had their own team that could design it. We had trademark and register symbols all over the place. Now we’ve moved to just super-simple. They’re all product names, with the One Microsoft logo. It couldn’t be simpler.

And if you look at the Surface Hub that Julia White demoed today, on that Surface Hub there’s one symbol. It’s the Microsoft symbol. If you look at the HoloLens that we just introduced on the side of the HoloLens that’s called the Microsoft HoloLens is the Microsoft symbol. The new phones we’ll be bringing out will have that symbol on the back, as well. So we’re just leaning into that very simple notion that it’s the corporate brand, or the company brand that matters more than anything.

We’ll also take the time every now and again, while most of our ad campaigns are going to be about the commercial cloud, and most of our ad campaigns are going to be about Windows 10 devices, every now and again we’ll take the moment to remind people what the Microsoft brand stands for, this notion of empowerment. Let’s take a look at one of the recent videos we did for the Super Bowl.

(Video segment.)

(Applause.)

So that’s it. Those are the six things that we’re trying to transform as a marketing organization. I hope it stimulated some thought in your mind. Maybe there are lessons you can apply to your own work. You get to see some of the technology that we’re using. Again, it’s part of the process, but it certainly isn’t all of it. And I hope it’s been a worthwhile session and, again, thank you so much for being here at Convergence. Enjoy the rest of the show.